The United States Department of Justice (“DOJ”) announced on February 8, 2019, the use of a new weapon in its enforcement arsenal to help manage the opioid crisis. It involved a coordinated effort including DOJ’s Prescription Interdiction & Litigation (“PIL”) Task Force, which deploys all available criminal, civil, and regulatory tools “to reverse the tide of opioid overdoses in the United States,” stated the press release announcing the civil action, here.
The government filed under seal a civil Complaint in the United States District Court for the Middle District of Tennessee against two affiliated Celina, Tennessee, pharmacies — Oakley Pharmacy, Inc., d/b/a Dale Hollow Pharmacy and Xpress Pharmacy; the pharmacies’ owner, Thomas Weir; and pharmacists John Polston, Michael Griffith, and Larry Larkin. The Complaint alleges that defendants were dispensing, and billing Medicare for, prescriptions in violation of the Controlled Substances Act and the False Claims Act. The Complaint also alleges that defendants’ dispensing of opioids was tied to the deaths of at least two people and the emergency medical treatment of other individuals for drug overdoses.
Just what exactly is so unusual about the government’s action here?
First, the government proceeded against the pharmacies and their owners/employees in secret, so to speak, by filing the civil action under seal, and then seeing an ex parte temporary restraining order and preliminary injunction, which is an extraordinary remedy because the defendant does not receive notice of the action in advance of the court proceeding. The court unsealed the Complaint after hearing the government’s motion and entering the TRO against defendants. The government’s memorandum in support of the TRO stated it was necessary to proceed with under seal filings and an ex parte TRO pursuant to 21 U.S.C. § 843(f), given defendants’ three-year DEA regulatory history described in the Complaint and TRO memorandum, a need to immediately halt illegal activities, and an alleged real threat that defendants would continue to violate the Controlled Substances Act and harm the public. Defendants allegedly violated their corresponding responsibility to ensure that prescriptions were issued for a legitimate medical purpose under 21 C.F.R. § 1306.04, but, in the alternative, also violated 21 U.S.C. § 841(a)(1), by knowingly and intentionally distributing and dispensing controlled substances outside the usual course of pharmacy practice, by filling, for example, an unsigned prescription and multiple prescriptions that presented with multiple “red flags,” according to the declaration of the government’s pharmacy expert.
The government also stated that the ex parte proceeding was necessary because it intended to execute search warrants to obtain dispensing records, files and other evidence of illegal conduct from the pharmacies’ premises, and was concerned that, with notice, Defendants could take steps to alter or destroy records.
Second, the government chose to first file in federal court a Complaint and a Motion for a TRO, instead of pursuing DEA’s typical (and expected) administrative remedy in a corresponding responsibility case, which is seeking a DEA administrative Immediate Suspension Order (“ISO”) under 21 U.S.C. § 824(d) and 21 C.F.R. § 1301.36. The ISO has the same impact as the TRO such that the pharmacy registrant is immediately “suspended” from handling controlled substances, without notice to the registrant, upon service of the ISO. In addition, an ISO does not require a filing or court intervention – the DEA acting administrator, after consideration of the facts and circumstances, may issue the ISO after determining there exists an imminent threat to the public health or safety.
In this case, however, the government noted at page 19 of its Memorandum in support of its TRO that DEA is “separately considering” an ISO (but we don’t know why it would need to do so at this point). However, the government stated an ISO would not have the ability to “restrain” the conduct of the individual defendants named in the Complaint because those individuals are not DEA registrants. The government also noted that the ISO lacks the “finality” of the injunctive relief sought in the underlying lawsuit. However, we note, as well, that a TRO and Preliminary Injunction are indeed interim remedies; if defendants choose to do so, the injunction matter will be fully heard by the court pursuant to Fed. R. Civ. P. 65.
Third, the government’s Complaint ties – in great detail – the pharmacies’ allegedly illegitimate prescriptions to violations of the False Claims Act, implicating the False Claims Act when prescriptions are filled for “illegitimate medical purposes or are not “reasonable and necessary” for the treatment of illness or injury. Although DEA has used in a similar approach in one other enforcement matter (against long term care pharmacy PharMerica), the government to our knowledge has not alleged violations of the False Claims Act in pharmacy corresponding responsibility matters. If successful, the government will be entitled to civil monetary penalties and treble damages for falsely billing Medicare for illegally dispensed prescriptions.
The government’s press release concluded with the following warning to pharmacists:
The action supported today by the Drug Enforcement Administration should serve as a warning to those in the pharmacy industry who choose to put profit over customer safety,” said D. Christopher Evans, Special Agent in Charge of DEA’s Louisville Field Division, which covers Tennessee, Kentucky, and West Virginia. “Pharmacists serve on the front lines of America’s opioid epidemic and they share responsibility with physicians to protect those whom they serve from the dangers associated with prescription medications. We will be vigilant in holding them accountable.